Question

consider the pricing fstructure of gondolas, what sort of change would you recommend? How would customer react? what revenue impact would your recomendations have?

Answer 1

The pricing structure of gondolas is such that 80 Euros are charged in the daytime and 100 Euros at night.

The change one would recommend is to reduce the night charges.

Customers would take it positively and choose to ride at nights also rather than just in the daytime.

Lowering the night rates will increase the number of customers that will ultimately lead to higher revenue.

Explanation:

Gondolas are regulated and protected by the city of Venice as approximately 60,000 tourists come on daily basis. Gondolas were the source of transportation early but more of a tourist activity nowadays. The pricing structure of gondolas is as follows :

For a day, 80 Euros for approximately 40 minutes and the maximum of 6 passengers are allowed at a time. For the night, it is 20 Euros higher than the usual rates.

The change that one would recommend is to lower the night rates and make those equal to that of the days. The reason being, more people prefer to ride in the daylight than the nights that make the place too crowded. If the night's charges get reduced and make equal to that of a day, then the customers can come at night and the market will no longer be crowded.

After this change, more customers will get attracted to the rides as the rates are the same for the day rides and night rides as well.

After making certain changes in the pricing policy, there will definitely be a change in the revenue structure. But the positive thing is that because of higher rates at nights, the customers who have decided not to ride will eventually come for rids. Increased customer satisfaction and constant flow of income will not let the revenue drop. Another thing that can be done to increase the revenue is to increase the capacity of Gondolas so that more passengers can ride at a time.